Buying a Home Out of an Estate in Ontario: What Buyers Face

Buying a home from an estate can mean a fair price and a motivated seller, but it can also mean a slower and less certain process. The person selling is not the owner, and the owner can no longer answer your questions.

This article explains the questions to ask about who can sign, the delays buyers sometimes meet, and the protections you can build into your offer. Estate situations vary a great deal, so a lawyer should review your particular deal.

Why an estate sale is different

When an owner dies, someone else must manage the property and make decisions about selling it. That person may be named in a will, or the role may need to be sorted out in another way. Because of this, an estate sale often has more steps than an ordinary sale.

Estate sellers also often know less about the home. They may not have lived in it recently, and may not be able to answer questions about repairs, renovations or past problems. That makes your own checks more important.

Who can sign the agreement

The key question is whether the person signing has the legal authority to sell. This depends on the facts of the estate, including whether there is a will and whether the person has been formally appointed. It is worth confirming with a lawyer rather than relying on what you are told.

Ask your lawyer to check these points before you are bound:

• Who is signing, and what document gives them authority.
• Whether more than one person must sign.
• Whether the sale needs any approval before it can close.
• Whether the seller can deliver clear title on the closing date.

Delays you may run into

Estate sales can take longer to finalize because the seller may need paperwork or approvals before they can close. Closing dates can be pushed back, and you may need to be flexible about timing. How long this takes depends on the estate, so ask for the seller's expected timeline and discuss it with your lawyer.

If you are selling another home, renting, or locking in a mortgage rate, build in some room. A firm closing date that depends on steps outside your control can be a problem for you.

Protections to put in your offer

Conditions such as a satisfactory home inspection must be waived or performed by the agreed time before the deal becomes binding, and must be used in good faith. Depending on the wording, if a condition is not met the buyer may terminate or the contract may end automatically, with the deposit returned. Once all conditions are waived, the agreement is firm and binding.

A conditional agreement is not final and binding until all its conditions are met or waived, so a seller who has accepted a conditional offer may still consider other offers. The seller protects itself with an escape clause that requires notice to the first buyer and gives that buyer a set time, for example 48 hours, to waive or satisfy its conditions.

Deposits matter too. The deposit is normally held by the brokerage in a real estate statutory trust account, and it can be released only with a mutual consent or release signed by all parties, or under a court order. Paying the deposit late or withholding it can itself breach the agreement.

Because estate sellers may not know the home's history, check whether proper permits were obtained for any renovations. In Ontario, a building permit is required before most construction, additions, renovations and changes of use, and the municipal building department can confirm what permits exist for a property.

What to do next

• Ask your lawyer to review the offer before you sign, especially the seller's authority and the closing date.
• Include conditions for inspection and financing that give you enough time.
• Pay the deposit on time, as the agreement requires.
• Contact the municipal building department about permits for past work.
• Plan for a closing date that could move, and keep backup arrangements.

Frequently asked questions